Sabah and PETRONAS Chart a Course for Greater Local Participation in Oil and Gas
- nabalunews
- Mar 7, 2025
- 3 min read
7 March 2025
KOTA KINABALU: Sabah’s Minister of Finance and Chairman of SMJ Energy, Datuk Seri Panglima Masidi Manjun, highlighted the critical role of Sabahan Oil and Gas Services and Equipment (OGSE) companies in driving the state’s economic growth.
"This is not just a forecast; it's a call to action," he declared. “We are empowering our local businesses to seize the immense opportunities within their reach. To succeed, Sabahan companies must rise to the challenge by meeting PETRONAS’ stringent standards and forging strategic partnerships that unlock new capabilities and experiences.”
His remarks set the stage for the unveiling of the Kinabalu Activity Outlook (KAO) 2025-2027, a comprehensive three-year forecast detailing upstream, downstream, gas, and maritime activities in Sabah. The KAO provides a clear roadmap for local OGSE companies to capitalise on emerging opportunities and strengthen their position in the industry.
Launched jointly by the Sabah State Government and PETRONAS on 28 February 2025, the KAO is a strategic roadmap designed to equip local OGSE companies with critical insights into upcoming opportunities with PETRONAS, its subsidiaries, and other Petroleum Arrangement Contractors (PACs). Over 200 representatives from Sabahan OGSE companies attended the event, which also revealed ambitious targets to boost local participation and foster stronger collaborations.
Following the remarkable growth of the past year, which saw contracts awarded to Sabahan businesses surge from RM613 million in 2021 to over RM2 billion in 2024, the Sabah State Government and PETRONAS have set ambitious targets for 2025-2027. These goals include achieving a 50% to 100% increase in local jobs awarded to Sabahan companies and a 50% to 100% increase in the number of contracts held by Sabah OGSE companies.
Puan Rashidah Alias, PETRONAS Vice President of Group Procurement, emphasised the importance of sustainable partnerships between PETRONAS and the Sabah State Government. “PETRONAS is fully committed to supporting the growth and development of Sabah’s OGSE sector. By working together, we can create a thriving and sustainable industry that benefits all Sabahans,” she stated.
Datuk Thomas Logijin, Permanent Secretary of the Ministry of Industrial Development and Entrepreneurship (MIDE), represented the Sabah State Government and outlined the state’s vision for the future of its oil and gas sector. “This is a pivotal moment for Sabah’s OGSE sector. By leveraging the KAO, embracing innovation, and actively seeking new opportunities, we can unlock the full potential of our local companies,” he said.
A key driver of this progress is the Sabah Local Content Council, chaired by Terry Biusing, SMJ Energy Executive Director for OGSE & Corporate. The council, which comprises representatives from the government, PETRONAS, operators, and local OGSE associations, plays a critical role in coordinating, facilitating, guiding, and supporting the implementation of initiatives aimed at boosting local participation. Under his leadership, the council has been instrumental in addressing challenges faced by local companies and fostering collaboration between stakeholders.
Recognising the importance of strategic partnerships, the Sabah State Government and PETRONAS have also established a Joint Task Force (JTF). In 2024, the JTF successfully implemented guidelines for mandatory partnerships between large, experienced companies and local Sabah businesses, resulting in increased participation of Sabahan companies in complex and high-value projects.
The launch of the KAO 2025-2027 demonstrates the shared commitment of the Sabah State Government and PETRONAS to build a robust, sustainable, and inclusive oil and gas industry that will serve as a cornerstone of Sabah’s economic future.
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